NDP-Net Domestic Product

TANMOY MUKHERJEE INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherjee

Advocate

NDP-

Tanmoy Mukherjee

Advocate

Net Domestic Product (NDP) measures the net value of final goods and services produced within the domestic territory of a country during one financial year after deducting depreciation.

Hence, NDP reflects Sustainable Domestic Income.

NDP focuses only on domestic territory, irrespective of ownership.

Formula –

NDP = GDP – Depreciation

NNP = NDP + Net Factor Income from Abroad (NFIA)

NDP at Factor Cost = Domestic Income

Example-

GDP = Rs. 3000 Crore

Depreciation =Rs. 400 Crore

Indirect taxes = Rs. 200 Crore

Subsidies = Rs. 50 Crore

NDP ^MP  = 3000 - 400 = 2600 Crore

NDP ^FC= 2600 - 200 + 50 = 2450 Crore

Importance of NDP-

Limitations of NDP-